Dubai's Emirates NBD H1 net profit up 17% to $1.3bln

Impairment allowances fell by 38% and cost of risk improved

  
A view of Emirates NBD head office in Dubai, UAE January 30, 2018. Image used for illustrative purpose.

A view of Emirates NBD head office in Dubai, UAE January 30, 2018. Image used for illustrative purpose.

REUTERS/Satish Kumar

Dubai’s biggest bank Emirates NBD said its net profit rose 17 percent to 4.8 billion dirhams ($1.3 billion) as a recovery in economic conditions led to higher retail lending and improvement in the cost of risk.

Total income, however, fell 9 percent year-on year (y-o-y) to 11.5 billion dirhams, the lender said in a statement Wednesday on Dubai Financial Market where its shares trade. Total expenses fell 6 percent y-o-y to 3.76 billion dirhams “on cost management.”

The bank posted a 22 percent rise in Q2 net profit at 2.46 billion dirham ($670 million) supported by higher fee and commission income and lower impairment charges.

Earnings per share rose to 0.70 dirhams from 0.60 dirhams in the year-ago period.

The lender managed to bring down impairment allowances by 38 percent y-o-y. Cost of risk substantially improved to 114 basis points (bps), the lowest, it claimed, since the pre-pandemic days of 2019.

Net interest margin held stable at 2.45 percent with lower cost of funding as strong Current Account Saving Account (CASA) balances help mitigate the lower yields on loans and liquid assets.

Meanwhile, Emirates Islamic, a part of the Emirates NBD Group, said H1 net profit jumped to 569 million dirhams on the back of higher non-funded income, lower costs and lower impairment allowances.

(Writing by Brinda Darasha; editing by Daniel Luiz)

brinda.darasha@refinitiv.com

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